Hemodynamic shear stress is a fundamental determinant of vascular remodeling and atherogenesis. Changes in focal adhesions, cytoskeletal organization and gene expression are major responses of endothelial cells to shear stress. Here, we show that activation of the small GTPase Rac is essential for gene expression and for providing spatial information for shear stress-induced cell alignment. Fluorescence resonance energy transfer (FRET) localizes activated Rac1 in the direction of flow. This directional Rac1 activation is downstream of shear-induced new integrin binding to extracellular matrix. Additionally, Rac1 mediates flow-induced stimulation of nuclear factor kappaB (NF-kappaB) and the subsequent expression of intercellular cell adhesion molecule 1 (ICAM-1), an adhesion receptor involved in the recruitment of leukocytes to atherosclerotic plaque. These studies provide a unifying model linking three of the main responses to shear stress that mediate both normal adaptation to hemodynamic forces and inflammatory dysfunction of endothelial cells in atherosclerosis.